1. IRAN CLAIMS IT GRABBED A U.S. DRONE
Iran's navy says it has captured a U.S. surveillance drone that was flying over the Persian Gulf. Iran's Revolutionary Guard Corps says the unmanned aircraft was brought down immediately after it entered Iranian airspace, according to the state-run news agency IRNA. A Pentagon official said it's unclear what kind of drone Iran nabbed — but it didn't belong to the U.S. "The U.S. Navy has fully accounted for all unmanned air vehicles operating in the Middle East region," the official said. "Our operations in the Gulf are confined to internationally recognized water and air space." Last month, Iranian jets fired on a U.S. drone over the Gulf. Last year, another drone (launched from Afghanistan) crashed in the Iranian desert. [CNN]
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2. WHITE HOUSE REJECTS GOP FISCAL CLIFF COUNTEROFFER
Speaker John Boehner (R-Ohio) on Monday offered a deficit reduction proposal to avert the fiscal cliff at the end of the year, when a slate of damaging tax hikes and spending cuts are set to take effect. Boehner's proposal — consisting of $800 billion in tax revenue from closing unspecified tax loopholes and deductions, and $1.2 trillion in spending cuts — came in response to an offer that President Obama made last week, which included $1.6 trillion in tax revenue (with a tax rate increase for the wealthiest Americans), $400 billion in cuts to Medicare and other entitlement programs, and $50 billion in new stimulus spending. The White House promptly rejected the offer. Income tax rates for the wealthy "have to rise," White House press secretary Jay Carney said. "And the Republicans need to acknowledge... that's the only way to get from here to there." [New York Times]
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3. BLOOMBERG URGED HILLARY CLINTON TO RUN FOR NYC MAYOR
New York City Mayor Michael Bloomberg, reportedly not happy about the candidates looking to succeed him, reportedly urged Secretary of State Hillary Clinton to consider running in the 2013 mayor's race. Three people confirmed to The New York Times that Bloomberg made the suggestion in a phone call several months ago. Clinton, the sources said, made it clear she had no interest in the job. Bloomberg has privately signaled support for Christine C. Quinn, the City Council speaker, should she run, although he's rumored to be looking for someone with more star power. "He is looking for somebody he can feel comfortable handing the reins over to," said Hank Sheinkopf, who worked on Bloomberg's last campaign. [New York Times]
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4. OBAMA WARNS ASSAD NOT TO USE CHEMICAL WEAPONS
President Obama issued a stern warning to Syrian President Bashar al-Assad on Monday, telling him that he would face a strong response from the international community if he used chemical weapons against rebel forces. Intelligence sources report that members of Assad's armed forces have moved around some of Assad's massive stockpile of chemical weapons in recent days. Using them would be "totally unacceptable," Obama said. "The world is watching," the president added during a Washington symposium on nuclear non-proliferation. "If you make the tragic mistake of using these weapons, there will be consequences, and you will be held accountable." [USA Today]
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5. U.S. CRITICIZES ISRAELI SETTLEMENT PLANS
The Obama administration on Monday urged Israel to back away from a plan to build 3,000 more homes for settlers in East Jerusalem and the occupied West Bank. "These actions are counterproductive and make it harder to resume direct negotiations to achieve a two-state solution," White House press secretary Jay Carney said. The unusually critical words from the White House came after five European governments condemned the settlement expansion in disputed Palestinian territory. Israel said Tuesday it was moving forward with the plans, which it announced last week after the Palestinian Authority ignored its protests and won an upgrade in its status at the United Nations from "entity" to "non-member observer state." [Reuters]
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6. APPLE OPENS ITUNES IN NEW COUNTRIES
Apple expanded its iTunes Store into 56 more countries Tuesday, including Russia, India, and Turkey. The expansion nearly doubled the geographical area where the service is available. The iTunes Store, offering 20 million songs, is now available in 119 countries. Apple's App Store is available in 155. The move opens up vast new markets for Apple — India has 137 million internet users, while Russia has 68 million. Pricing will vary from country to country, with Russians paying 15 rubles (48 cents) for a song, while customers in India pay seven rupees (12 cents). [MarketWatch]
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7. ASHLEY JUDD CONSIDERS SENATE BID
Movie star Ashley Judd is "seriously exploring" running for the Senate in 2014, according to Politico. If she runs, Judd will be the biggest celebrity to run for Congress since comedian Al Franken won a Minnesota seat in 2008. Judd, an eighth-generation Kentuckian, would be an underdog. She would be challenging Senate Minority Leader Mitch McConnell, one of the most powerful Republicans in Congress. Judd, who would add the star power that some Democrats crave to the race, has been speaking to potential supporters, senators, and others to determine whether McConnell would be vulnerable. "She is doing all the things that a serious candidate exploring a race should do," Rep. John Yarmuth (D-Ky.) said. [Politico]
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8. EURO BOUNCES BACK ON GREEK OPTIMISM
The euro hit a six-month high on Tuesday, a sign that investors are optimistic about Greece's plan to buy back some of its debt. The buyback is a critical part of a deal to secure a fresh infusion of bailout money Greece needs to avoid defaulting on its debt while it cuts spending to get its finances in order and dig out of a full-blown economic depression. Greece's troubles triggered the eurozone crisis three years ago, so its positive steps have triggered relief. "Greece is on track with its debt buyback, Spain came out and said it would take the 40 billion for its banks, and Portugal will get its next round of funding," said equities strategist Heinz-Gerd Sonnenschein at Postbank in Germany. "With it looking like Europe is on track, it is now over to the U.S. (to find a fiscal cliff deal)." [Reuters]
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9. AILES TOLD PETRAEUS TO RUN FOR PRESIDENT
Fox News chief Roger Ailes last year urged then-Gen. David Petraeus to consider running for president, according to Bob Woodward at The Washington Post. Ailes reportedly asked a Fox News analyst heading to Afghanistan, where Petraeus was then serving as commander of U.S. and coalition forces, to pass on his advice. Ailes, Woodward says, told Petraeus to turn down President Obama's offer to make him director of the CIA (a job he took, then quit last month after the FBI uncovered evidence he was having an extramarital affair with his biographer, Paula Broadwell). Ailes said Petraeus should insist on a better job — chairman of the Joint Chiefs of Staff — and to run for president if he didn't get it. Ailes confirmed the account, saying he meant it as a "wise-ass" joke but thought Petraeus would have shaken up the GOP field. [Washington Post]
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10. WORLD SWOONS OVER ROYAL BABY NEWS
Leaders in the former British colonies of Australia and New Zealand expressed delight in the news that Will and Kate, the duke and duchess of Cambridge, are expecting their first child. Australian Prime Minister Julia Gillard said the news brought "joy to many around the world." She also wished the duchess, known as Kate Middleton before her marriage, a quick recovery from the severe morning sickness that sent her to the hospital and triggered official confirmation that she was pregnant. British papers were filled with speculation Tuesday that the duchess might be carrying twins, because the acute morning sickness she's suffering from, called hyperemesis gravidarum, is more common in multiple-birth pregnancies. [Telegraph]
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